Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CIVI | |
Entity Registrant Name | CIVITAS SOLUTIONS, INC. | |
Entity Central Index Key | 1,608,638 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,229,167 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 0 | $ 7,297 |
Restricted cash | 330 | 327 |
Accounts receivable, net of allowances of $18,953 and $15,997 at June 30, 2018 and September 30, 2017 | 174,539 | 172,850 |
Prepaid expenses and other current assets | 22,233 | 12,998 |
Total current assets | 197,102 | 193,472 |
Property and equipment, net | 192,025 | 183,338 |
Intangible assets, net | 325,730 | 313,075 |
Goodwill | 315,811 | 273,325 |
Restricted cash | 50,000 | 50,000 |
Other assets | 41,020 | 36,172 |
Total assets | 1,121,688 | 1,049,382 |
Current liabilities: | ||
Accounts payable | 34,088 | 35,275 |
Accrued payroll and related costs | 67,770 | 78,011 |
Other accrued liabilities | 40,690 | 42,284 |
Obligations under capital lease, current | 757 | 608 |
Current portion of long-term debt | 11,487 | 6,554 |
Total current liabilities | 154,792 | 162,732 |
Other long-term liabilities | 78,770 | 77,081 |
Deferred tax liabilities, net | 13,713 | 22,349 |
Obligations under capital lease, less current portion | 11,033 | 4,404 |
Long-term debt, less current portion | 694,819 | 619,899 |
Commitments and Contingencies (Note 14) | ||
Stockholders’ equity | ||
Common stock, $0.01 par value; 350,000,000 shares authorized; and 36,229,067 and 37,441,257 shares issued and outstanding at June 30, 2018 and September 30, 2017, respectively | 362 | 374 |
Additional paid-in capital | 287,065 | 301,819 |
Accumulated gain (loss) on derivatives, net of tax expense (benefit) of $1,521 and ($62) at June 30, 2018 and September 30, 2017, respectively | 3,988 | (91) |
Accumulated deficit | (122,854) | (139,185) |
Total stockholders’ equity | 168,561 | 162,917 |
Total liabilities and stockholders’ equity | $ 1,121,688 | $ 1,049,382 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 18,953 | $ 15,997 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (shares) | 36,229,067 | 37,441,257 |
Common stock, shares outstanding (shares) | 36,229,067 | 37,441,257 |
Accumulated loss on derivatives, tax expense (benefit) | $ 1,521 | $ (62) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net revenue | $ 404,498 | $ 372,345 | $ 1,192,717 | $ 1,094,138 |
Cost of revenue | 315,934 | 292,498 | 948,803 | 861,992 |
Operating expenses: | ||||
General and administrative | 40,269 | 40,413 | 128,569 | 123,992 |
Depreciation and amortization | 23,741 | 19,161 | 71,509 | 56,146 |
Total operating expenses | 64,010 | 59,574 | 200,078 | 180,138 |
Income from operations | 24,554 | 20,273 | 43,836 | 52,008 |
Other income (expense): | ||||
Other income (expense), net | (83) | (149) | (896) | 762 |
Interest expense | (10,229) | (8,339) | (28,815) | (25,117) |
Income before income taxes | 14,242 | 11,785 | 14,125 | 27,653 |
Provision (benefit) for income taxes | 4,657 | 4,424 | (2,366) | 10,634 |
Net income | $ 9,585 | $ 7,361 | $ 16,491 | $ 17,019 |
Basic income per common share (in dollars per share) | $ 0.26 | $ 0.20 | $ 0.44 | $ 0.46 |
Diluted income per common share (in dollars per share) | $ 0.26 | $ 0.20 | $ 0.44 | $ 0.45 |
Weighted average number of common shares outstanding, basic (in shares) | 36,503,170 | 37,323,458 | 37,136,375 | 37,278,760 |
Weighted average number of common shares outstanding, diluted (in shares) | 36,592,727 | 37,495,488 | 37,249,551 | 37,413,264 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 9,585 | $ 7,361 | $ 16,491 | $ 17,019 |
Other comprehensive income, net of tax: | ||||
Gain (loss) on derivative instrument classified as cash flow hedge, net of tax of $105 and $1,583 for the three and nine months ended June 30, 2018, respectively, and ($339) and $2,074 for the three and nine months ended June 30, 2017, respectively | 276 | (499) | 4,079 | 3,055 |
Comprehensive income | $ 9,861 | $ 6,862 | $ 20,570 | $ 20,074 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax effects of changes in unrealized gain on derivatives | $ 105 | $ 1,583 | $ (339) | $ 2,074 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Gain (Loss) on Derivatives | Accumulated Deficit |
Increase (Decrease) in Stockholders' Equity | |||||
Cumulative effect adjustment on adoption of ASU 2016-09, Compensation - Stock Compensation - Improvements to Employee Share-Based Payments Accounting | $ 59 | $ 219 | $ (160) | ||
Beginning balance at Sep. 30, 2017 | $ 162,917 | $ 374 | 301,819 | $ (91) | (139,185) |
Beginning balance (shares) at Sep. 30, 2017 | 37,441,257 | 37,441,257 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock under employee incentive plans, net of shares surrendered | $ (1,108) | $ 1 | (1,109) | ||
Issuance of common stock under employee incentive plans, net of shares surrendered (shares) | 139,702 | ||||
Repurchase of common stock under stock repurchase program | (19,669) | $ (13) | (19,656) | ||
Repurchase of common stock under stock repurchase program (shares) | (1,351,892) | ||||
Stock-based compensation | 5,792 | 5,792 | |||
Other comprehensive income, net of tax | 4,079 | 4,079 | |||
Net income | 16,491 | 16,491 | |||
Ending balance at Jun. 30, 2018 | $ 168,561 | $ 362 | $ 287,065 | $ 3,988 | $ (122,854) |
Ending balance (shares) at Jun. 30, 2018 | 36,229,067 | 36,229,067 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities: | ||
Net income | $ 16,491 | $ 17,019 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for accounts receivable allowances | 16,598 | 13,940 |
Depreciation and amortization | 71,509 | 56,146 |
Amortization original issue discount and financing costs | 1,657 | 1,407 |
Stock-based compensation | 5,792 | 6,596 |
Deferred income taxes | (10,959) | (8,205) |
Loss on disposal of assets | 1,684 | 327 |
Gain from derivatives | (244) | 0 |
Company owned life insurance benefit | 0 | (501) |
Change in fair value of contingent consideration | 0 | 194 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (13,953) | (17,327) |
Other assets | (7,803) | 8,280 |
Accounts payable | (1,656) | (1,896) |
Accrued payroll and related costs | (10,819) | (5,202) |
Other accrued liabilities | (2,123) | 2,424 |
Other long-term liabilities | 1,089 | (3,182) |
Net cash provided by operating activities | 67,263 | 70,020 |
Investing activities: | ||
Acquisition of businesses, net of cash acquired | (97,465) | (42,432) |
Acquisition of intangible assets | (1,200) | 0 |
Purchases of property and equipment | (35,645) | (32,981) |
Deposit on acquisition | 0 | (9,451) |
Change in restricted cash | (3) | 751 |
Cash proceeds from Company owned life insurance policies | 0 | 738 |
Proceeds from sale of assets | 2,866 | 1,164 |
Net cash used in investing activities | (131,447) | (82,211) |
Financing activities: | ||
Proceeds from long term-debt, net of original issue discount | 74,452 | 0 |
Repayments of long-term debt | (5,499) | (4,916) |
Proceeds from borrowings under senior revolver | 507,300 | 4,100 |
Repayments of borrowings under senior revolver | (497,800) | (4,100) |
Repayments of capital lease obligations | (530) | (407) |
Cash paid for earn out obligations | 0 | (6,109) |
Payments of deferred financing costs | (258) | (878) |
Issuance of common stock under employee equity incentive plans | 0 | 357 |
Taxes paid related to net share settlements of equity awards | (1,109) | (436) |
Repurchase of common stock under stock repurchase program | (19,669) | 0 |
Net cash provided by (used in) financing activities | 56,887 | (12,389) |
Net decrease in cash and cash equivalents | (7,297) | (24,580) |
Cash and cash equivalents at beginning of period | 7,297 | 50,683 |
Cash and cash equivalents at end of period | 0 | 26,103 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 26,637 | 23,261 |
Cash paid for income taxes | 12,277 | 13,493 |
Supplemental disclosure of non-cash activities: | ||
Accrued property and equipment | 756 | 946 |
Fair value of contingent consideration related to acquisitions | 1,080 | 0 |
Property and equipment acquired through capital leases | $ 7,308 | $ 0 |
Business Overview
Business Overview | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | 1. Business Overview Civitas Solutions, Inc. ("Civitas"), through its wholly-owned subsidiaries (collectively, the "Company"), is the leading provider of home- and community-based health and human services to adults and children with intellectual and/or developmental disabilities, acquired brain injury and other catastrophic injuries and illnesses; and to youth with emotional, behavioral and/or medically complex challenges. Since the Company’s founding in 1980, the Company has evolved into a diversified national network providing an array of high-quality services and care in large, growing and highly-fragmented markets. The Company currently provides services to individuals with intellectual and/or developmental disabilities (“I/DD”), individuals with catastrophic injuries and illnesses, particularly acquired brain injury (“ABI”), youth with emotional, behavioral and/or medically complex challenges, or at-risk youth (“ARY”), and elders in need of day health services to support their independence, or adult day health (“ADH”). As of June 30, 2018 , the Company operated in 36 states, serving approximately 12,500 individuals in residential settings and 19,000 individuals in non-residential settings. The Company designs customized service plans to meet the individual needs of those served by the Company, which it delivers in home- and community-based settings. Most of the Company’s service plans involve residential support, typically in small group homes, host home settings, or specialized community facilities, designed to improve the quality of life of the individuals served by the Company and to promote their independence and participation in community life. Other services offered include supported living, day and transitional programs, vocational services, case management, family-based and outpatient therapeutic services, post-acute treatment and neurorehabilitation, neurobehavioral rehabilitation and physical, occupational and speech therapies, among others. The Company’s customized service plans offer individuals as well as the payors of these services, an attractive, cost-effective alternative to health and human services provided in large, institutional settings. Civitas is the parent of a consolidated group of subsidiaries that market their services under The MENTOR Network tradename. NMH Holdings, LLC (“NMHH”) is a wholly owned subsidiary of Civitas and National Mentor Holdings, Inc. (“NMHI”) is a wholly owned subsidiary of NMHH. The financial results of Civitas are primarily composed of the financial results of NMHI and its subsidiaries on a consolidated basis. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 , which is on file with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial statements in accordance with GAAP. Intercompany balances and transactions between the Company and its subsidiaries have been eliminated in consolidation. Operating results for the three and nine months ended June 30, 2018 may not necessarily be indicative of results to be expected for any other interim period or for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Adoption of New Accounting Pronouncements Stock Compensation —The Company adopted the guidance in Accounting Standards Update ("ASU") No. 2016-09 Compensation - Stock Compensation - Improvements to Employee Share-Based Payments Accounting , on October 1, 2017. Under this standard, entities are permitted to make an accounting policy election to either estimate forfeitures on share-based payment awards, as previously required, or to recognize forfeitures as they occur. The Company has elected to recognize forfeitures as they occur and the impact of that change in accounting policy has been recorded as a $0.2 million cumulative effect adjustment to increase accumulated deficit as of October 1, 2017. ASU No. 2016-09 requires that all income tax effects related to settlements of share-based payment awards be reported in earnings as an increase (or decrease) to income tax expense (benefit). Previously, income tax benefits at settlement of an award were reported as an increase (or decrease) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits reported in earnings during the award’s vesting period. The requirement to report those income tax effects in earnings has been applied on a prospective basis to settlements occurring on or after October 1, 2017, and the impact of applying the guidance was not material to the consolidated financial statements for the three and nine months ended June 30, 2018 . Application of the guidance may result in fluctuations in the Company’s effective tax rate depending on how many options are exercised, how many restricted stock units vest and the volatility of the Company’s stock price. ASU No. 2016-09 also requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award’s vesting period. The Company has elected to apply the changes in cash flow classification on a prospective basis. Income Taxes — In March 2018, the FASB issued ASU No. 2018-05— Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (ASU 2018-05). The update provides guidance associated with the accounting and disclosures around the enactment of the Act and the Securities and Exchange Commission’s Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). This guidance was effective upon issuance and has been applied to the condensed consolidated financial statements and related disclosures beginning in the second quarter of fiscal 2018, see Note 10 for the disclosures related to this amended guidance. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements Revenue from Contracts with Customers— In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Topic 606 (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The FASB has subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. ASU 2014-09, as amended, is effective for the Company’s fiscal year beginning October 1, 2018, and, at that time, the Company will adopt the new standard under the modified retrospective approach for contracts with customers. Under the modified retrospective approach, the guidance is applied to the most current period presented, recognizing the cumulative effect of the adoption change as an adjustment to beginning retained earnings. In fiscal 2017, the Company established a formal program and cross-functional implementation team to identify, design and implement changes to its accounting systems and policies and internal controls to support recognition and disclosure under the new standard. This process included a review of the requirements under the new standard compared to the current accounting policies for each of the Company’s revenue streams. As of the end of the third quarter of fiscal 2018, the Company substantially completed its review and does not expect a material impact on its consolidated financial statements upon implementation on October 1, 2018. The Company is currently preparing to implement changes to accounting policies and controls to support the new revenue recognition and disclosure requirements, which will be finalized during the fourth quarter of fiscal 2018. Leases — In February 2016, the FASB issued ASU No. 2016-02— Leases (Topic 842) (ASU 2016-02). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The standard will be effective for the Company on October 1, 2019. In July 2018, the FASB issued ASU No. 2018-11 — Leases (Topic 842): Targeted Improvements (ASU 2018-11) . Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company is still evaluating the method of adoption. The adoption of this standard is expected to have a material impact on the Company’s financial position. As of June 30, 2018 , the Company had gross operating lease commitments of approximately $361 million . Upon adoption, a substantial portion of these lease commitments will be recorded at their net present value as a right of use asset and a lease obligation. Statement of Cash Flows— In November 2016, the FASB issued ASU No. 2016-18— Statement of Cash Flows (Topic 230): Restricted Cash . The update requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will be applied using a retrospective transition method to each period presented and will be effective for the Company on October 1, 2018. As of June 30, 2018 and September 30, 2017 , the Company had total restricted cash of $50.3 million . Business Combinations — In January 2017, the FASB issued ASU No. 2017-01— Business Combinations (Topic 805): Clarifying the Definition of a Business . The update provides guidance to determine when an integrated set of assets and activities is not a business. When substantially all of the fair value of the gross assets acquired, or disposed of, is concentrated in a single identifiable asset or a group of similar identifiable assets, then the acquisition, or disposition, is not a business. The amendments in this update should be applied prospectively on or after the effective date. No disclosures are required at transition. The new standard will be effective for the Company on October 1, 2018. Early application of the amendments in this update is permitted for transactions meeting certain criteria. This standard could reduce the number of acquisitions that are treated as business combinations in the future. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 4. Long-Term Debt As of June 30, 2018 and September 30, 2017 , the Company’s long-term debt consisted of the following: (in thousands) June 30, September 30, Term loan principal; principal and interest are due in quarterly installments through January 31, 2021 $ 701,978 $ 632,476 Original issue discount on term loan, net of accumulated amortization (1,130 ) (901 ) Deferred financing costs, net of accumulated amortization (4,042 ) (5,122 ) Senior secured revolving credit facility 9,500 — 706,306 626,453 Less current portion of the term loan 7,331 6,554 Less current portion of the senior secured revolving credit facility; matures on January 31, 2019 4,156 — Long-term debt $ 694,819 $ 619,899 Senior Secured Credit Facilities NMHI's senior credit agreement (the “senior credit agreement”), as amended, governs a $730.0 million (original $655.0 million term loan plus a $75.0 million incremental term loan funded on October 25, 2017) Tranche B term loan facility (the “term loan facility”), of which $50.0 million was deposited in a cash collateral account in support of the issuance of letters of credit under an institutional letter of credit facility (the “institutional letter of credit facility”), and a $160.0 million senior secured revolving credit facility (the “senior revolver”). The term loan facility matures on January 31, 2021, a portion of the commitments under the senior revolver matures on January 31, 2019 and a portion of the commitments under the senior revolver matures on January 31, 2021, as described below. All of the obligations under the senior secured credit facilities are guaranteed by NMHH and the subsidiary guarantors named therein. The senior credit agreement provides that NMHI may make one or more offers to the lenders, and consummate transactions with individual lenders that accept the terms contained in such offers, to extend the maturity date of the lender’s term loans and/or revolving commitments, subject to certain conditions, and any extended term loans or revolving commitments will constitute a separate class of term loans or revolving commitments. On October 24, 2017, NMHI entered into Amendment No. 6 to its senior credit agreement which provided for an incremental $75.0 million term loan. The net proceeds of the incremental term loan were used by the Company for the acquisition of Mentis Neuro Rehabilitation, LLC, with any excess proceeds used for general corporate purposes. On November 21, 2017, NMHI entered into Amendment No. 7 to its senior credit agreement which increased the aggregate revolving commitments from $120.0 million to $160.0 million and extended the maturity date for $90.0 million of the revolving commitments (the “Extended Revolving Commitments") to January 31, 2021. The terms of the remaining $70.0 million of the revolving commitments (the "Initial Revolving Commitments"), which mature on January 31, 2019, remain unchanged. All of the other terms of the Extended Revolving Commitments are identical to the Initial Revolving Commitments, except that the applicable margin for the Extended Revolving Commitments will decrease by 0.25% per annum when the Initial Revolving Commitments are terminated or expire. The senior revolver includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as the “swingline loans.” Any issuance of letters of credit or borrowing on a swingline loan will reduce the amount available under the senior revolver. As of June 30, 2018 , NMHI had $702.0 million of borrowings outstanding under the term loan facility, $9.5 million of borrowings outstanding under the senior revolver, $48.5 million of letters of credit issued under the institutional letter of credit facility and $2.9 million of standby letters of credit under the senior revolver. Borrowings under the term loan facility bear interest, at our option, at: (i) an alternate base rate ("ABR") equal to the greater of (a) the prime rate of Barclays Bank PLC, (b) the federal funds rate plus 1/2 of 1.0%, and (c) the Eurodollar rate for an interest period of one-month plus 100 basis points (provided that the ABR applicable to the term loan facility will not be less than 2.00% per annum), plus 2.00% ; or (ii) the Eurodollar rate (provided that the Eurodollar rate applicable to the term loan facility will not be less than 0.75% per annum), plus 3.00% . Borrowings under the revolving and swingline loans bear interest at our option at (i) an ABR equal to the greater of (a) the prime rate of Barclays Bank PLC, (b) the federal funds rate plus 1/2 of 1.0%, and (c) the Eurodollar rate for an interest period of one-month plus 100 basis points (provided that the ABR applicable to the term loan facility will not be less than 2.00% per annum), plus 2.25% ; or (ii) the Eurodollar rate (provided that the Eurodollar rate applicable to the term loan facility will not be less than 0.75% per annum), plus 3.25% . NMHI is also required to pay a commitment fee to the lenders under the senior revolver at an initial rate of 0.50% of the average daily unutilized commitments thereunder. NMHI must also pay customary letter of credit fees. The senior credit agreement requires NMHI to make mandatory prepayments, subject to certain exceptions, on a percentage of NMHI's annual Excess Cash Flow, as defined in the senior credit agreement. NMHI determines whether or not a mandatory prepayment is required at the end of each fiscal year. NMHI was not required to make a prepayment for the fiscal year ended September 30, 2017 . Covenants The senior credit agreement contains negative covenants, including, among other things, limitations on the Company’s ability to incur additional debt, create liens on assets, transfer or sell assets, pay dividends, redeem stock or make other distributions or investments, and engage in certain transactions with affiliates. The senior credit agreement contains a springing financial covenant. If, at the end of any fiscal quarter, the Company’s outstanding borrowings under the senior revolver exceeds 30% of the commitments thereunder, it is required to maintain at the end of each such fiscal quarter a consolidated first lien leverage ratio of not more than 5.00 to 1.00 . The springing financial covenant was not in effect as of June 30, 2018 or September 30, 2017 as the Company’s usage of the senior revolver did not exceed the threshold for each quarter. Derivatives On January 20, 2015, NMHI entered into two interest rate swap agreements in an aggregate notional amount of $375.0 million in order to reduce the variability of cash flows of the Company’s variable rate debt. NMHI entered into these interest rate swaps to hedge the risk of changes in the floating rate of interest on borrowings under the term loan. Under the terms of the swaps, NMHI will receive from the counterparty a quarterly payment based on a rate equal to the greater of 3-month LIBOR or 1.00% per annum, and NMHI will make payments to the counterparty based on a fixed rate of 1.795% per annum, in each case on the notional amount of $375.0 million , settled on a net payment basis. The swap agreements expire on March 31, 2020. The fair value of the swap agreements, which represents the price that would be received to transfer the agreement in an orderly transaction between market participants, was an asset of $5.8 million and a liability of $0.2 million as of June 30, 2018 and September 30, 2017 , respectively. Based on the timing of the associated cash flows, the fair value was split between current and long-term classification on the Company’s consolidated balance sheet in Prepaid expenses and other current assets and Other assets as of June 30, 2018 and in Other accrued liabilities as of September 30, 2017 . The fair value was determined based on pricing models and independent formulas using current assumptions. Hedge ineffectiveness, if any, associated with the swap is recorded as income or expense in the period incurred. During the three and nine months ended June 30, 2018 , the ineffective portion of gains resulting from changes in fair value was $0.1 million and $0.2 million which was recorded in Other income (expense), net. There was no hedge ineffectiveness recorded during the three and nine months ended June 30, 2017 . No amounts were excluded from ineffectiveness testing for the three and nine months ended June 30, 2018 and 2017 . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation 2014 Plan Civitas maintains a 2014 Omnibus Incentive Plan (“2014 Plan”). As of June 30, 2018 , the 2014 Plan authorized the issuance of up to 7,786,478 shares of common stock as stock-based awards, including incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), restricted stock units (“RSUs”) and performance based restricted stock units (“PRSUs”). Stock Options Stock option activity for the nine months ended June 30, 2018 is presented below: (in thousands, except share and per share amounts) Number of Weighted- Weighted- Aggregate Outstanding at September 30, 2017 877,781 $ 18.65 Granted 155,041 18.80 Exercised 17,608 17.00 Forfeited 36,381 18.64 Expired 23,081 19.87 Outstanding at June 30, 2018 955,752 $ 18.67 7.6 $ 13 Exercisable at June 30, 2018 566,980 $ 18.55 6.8 $ — Vested or expected to vest as of June 30, 2018 955,752 $ 18.67 7.6 $ 13 The Company utilizes the Black-Scholes valuation model for estimating the fair value of stock options. Options granted under the 2014 Plan during the nine months ended June 30, 2018 were valued using the following assumptions: 2018 Risk-free interest rate 2.22% - 2.74% Expected term 6 years Expected volatility 33.56% - 35.81% Expected dividend yield — % The Company recognizes the fair value of the stock option awards as stock-based compensation expense over the requisite service period of the individual grantee, which equals the vesting period. The total intrinsic values of options exercised was less than $0.1 million for the nine months ended June 30, 2018 . As of June 30, 2018 , there was $1.9 million of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of 1.8 years. Restricted Stock Unit Awards (RSUs) Restricted stock unit activity for the nine months ended June 30, 2018 is presented below: Number of Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested units at September 30, 2017 677,406 $ 19.20 Granted 405,011 18.21 Forfeited 63,764 18.74 Vested 197,105 19.94 Non-vested units at June 30, 2018 821,548 $ 18.56 The fair value of each restricted stock unit was determined based on the Company's closing stock price on the date of grant. The Company recognizes the fair value of the RSUs as stock-based compensation expense over the requisite service period of the individual grantee, which equals the vesting period. The total fair values of RSUs that vested during the three and nine months ended June 30, 2018 was $0.1 million and $3.5 million , respectively. As of June 30, 2018 , there was $10.8 million of unrecognized compensation expense related to unvested restricted stock unit awards. This cost is expected to be recognized over a weighted-average period of 1.9 years. Performance Based Restricted Stock Units (PRSUs) During the nine months ended June 30, 2018 , the Company awarded 50,834 PRSUs. These PRSUs vest based upon the achievement of established performance targets over the three year performance period which ends September 30, 2020. The number of PRSUs that may vest varies between 0% - 200% based on the achievement of such goals. The PRSUs were valued at $18.76 per share based on the closing price of the Company’s common stock on the date of grant. To calculate compensation expense, the Company forecasts the likelihood of achieving the predefined performance targets and calculates the number of PRSUs expected to be earned. As of June 30, 2018 , the Company expects to recognize $1.0 million of stock-based compensation expense related to outstanding PRSUs based on the expected attainment levels. This cost is expected to be recognized over a weighted-average period of 2.0 years. A summary of PRSU activity for the nine months ended June 30, 2018 is as follows: Number of Performance Based Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested units at September 30, 2017 84,505 $ 19.85 Granted 50,834 18.76 Forfeited — — Vested — — Non-vested units at June 30, 2018 135,339 $ 19.44 Units expected to vest as of June 30, 2018 73,646 $ 19.09 Stock-based Compensation Expense The Company recorded stock-based compensation expense for stock options, RSUs and PRSUs under the 2014 Plan of $2.0 million and $5.8 million during the three and nine months ended June 30, 2018 , respectively, and $2.2 million and $6.6 million during the three and nine months ended June 30, 2017 , respectively. Stock-based compensation expense is included in general and administrative expense in the consolidated statements of income. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 6. Stockholders' Equity On February 8, 2018, the Company announced that the Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $25.0 million of the Company’s outstanding common stock from time to time in the open market, through negotiated transactions or otherwise (including, without limitation, the use of Rule 10b5-1 plans). The stock repurchase program will expire on August 12, 2018 or the date on which the total repurchase amount has been spent, whichever occurs first. The Company intends to conduct any open market stock repurchase activities in compliance with the safe harbor provisions of Rule 10b-18 of the Exchange Act. During the nine months ended June 30 2018, the Company repurchased 1,351,892 shares for $19.7 million under the program, which has been implemented through a 10b5-1 plan. As of June 30, 2018 , the Company has remaining authorization to repurchase up to $5.3 million of common stock under the program. |
Business Combinations
Business Combinations | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 7. Business Combinations The operating results of the businesses acquired are included in the consolidated statements of income from the date of acquisition. The Company accounted for the acquisitions under the acquisition method and, as a result, the purchase price was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess of the purchase price over the estimated fair value of net tangible assets was allocated to specifically identified intangible assets, with the residual being allocated to goodwill. Fiscal 2018 Acquisitions During the nine months ended June 30, 2018 , the Company acquired the assets or equity interests of nine companies for total consideration of $96.4 million , net of $0.8 million of cash acquired, and including $1.1 million of contingent consideration. Mentis Neuro Rehabilitation, LLC (“Mentis”). On October 25, 2017 , the Company acquired all of the outstanding membership interests of Mentis for $74.7 million , net of $0.8 million of cash acquired. Mentis is located in Texas and provides specialty rehabilitation services to individuals recovering from acquired brain injuries. The Company acquired $35.3 million of identifiable intangible assets which included approximately $30.2 million of agency contracts with a weighted average useful life of 12 years, $3.8 million of licenses and permits with a weighted average useful life of 10 years, and $0.9 million in tradenames with a weighted average useful life of 5 years. The Company also acquired $4.9 million of other assets, net of liabilities, consisting primarily of accounts receivable and fixed assets. The estimated fair values of the intangible assets acquired at the date of acquisition were determined based on a preliminary valuation that has yet to be finalized. In addition, the accounting for the acquired deferred tax assets and liabilities is provisional and subject to further refinement as the tax basis of assets acquired and liabilities assumed is finalized. As a result of the acquisition, the Company recorded $34.5 million of goodwill in the SRS segment, which is not expected to be deductible for tax purposes. Unique Options, LLC (“Unique”) . On December 4, 2017 , the Company acquired the assets of Unique for $5.9 million . Unique is located in Michigan and provides vocational rehabilitation, training and similar services to individuals with acquired brain injuries and similar conditions. The Company acquired $3.9 million of identifiable intangible assets which included $3.7 million of agency contracts with a weighted average useful life of 11 years. The estimated fair values of the intangible assets acquired at the date of acquisition were determined based on a preliminary valuation that has yet to be finalized. As a result of this acquisition, the Company recorded $2.0 million of goodwill in the SRS segment, which is expected to be deductible for tax purposes. Hartwell Healthcare, LLC, and Polyclinic, LLC (“Aging Well and Living Well”). On April 2, 2018 , the Company acquired the assets of Aging Well and Living Well for $13.2 million . Aging Well and Living Well are located in Massachusetts and provide person-centered day services to elders, including medication management and nutritional and nursing support. The Company acquired $9.0 million of identifiable intangible assets which included $8.1 million of agency contracts with a weighted average useful life of 12 years and $0.9 million of licenses and permits with a weighted average useful life of 10 years. The estimated fair values of the intangible assets acquired at the date of acquisition were determined based on a preliminary valuation that has yet to be finalized. As a result of this acquisition, the Company recorded $4.1 million of goodwill in the Corporate and Other segment, which is expected to be deductible for tax purposes. Other Acquisitions. During the nine months ended June 30, 2018 , the Company acquired the assets of Powell Life Skills Inc. (“Powell”), Jac-Lin Manor, Inc. (“Jac-Lin”), Dungarvin Wisconsin, LLC (“Dungarvin”), Resources for Human Development, Inc. (“RHD”), Circle of Support, Inc. (“Circle”), and Wexner Heritage Village, Inc. (“Shalom House South”). Total cash consideration for these companies was $1.6 million and total contingent consideration was $1.1 million . The following table summarizes the recognized amounts of identifiable net assets acquired at the date of each acquisition: (in thousands) Identifiable Intangible Assets Other Assets, Net Total Identifiable Assets Goodwill Purchase Consideration Mentis $ 35,300 $ 4,885 $ 40,185 $ 34,502 $ 74,687 Unique 3,939 22 3,961 1,985 5,946 Aging Well and Living Well 9,035 12 9,047 4,105 13,152 Other acquisitions 2,534 111 2,645 — 2,645 Total $ 50,808 $ 5,030 $ 55,838 $ 40,592 $ 96,430 The Company’s consolidated statement of income for the nine months ended June 30, 2018 included revenue totaling approximately $33.2 million from the acquisition date of each respective acquisition. The Company has not disclosed income from operations because it is immaterial. Fiscal 2018 Pro Forma Results of Operations The following table reflects the unaudited pro forma results of operations for the three and nine months ended June 30, 2018 and 2017 assuming that the acquisitions made during the three and nine months ended June 30, 2018 and 2017 had occurred on October 1, 2016 and 2015, respectively. (in thousands) Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net revenue $ 404,498 $ 391,043 $ 1,201,302 $ 1,160,366 Net income 9,585 10,641 17,343 22,392 The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results that would have been achieved had the acquisitions occurred as of October 1, 2016 and 2015, or the results that may be achieved in future periods. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 8. Goodwill and Intangible Assets Goodwill The changes in goodwill for the nine months ended June 30, 2018 are as follows (in thousands): I/DD SRS ARY Corporate and Other Total Balance as of September 30, 2017 $ 159,316 $ 85,525 $ 28,484 $ — $ 273,325 Goodwill acquired through acquisitions — 36,487 — 4,105 40,592 Adjustments to prior acquisitions (1) 1,894 — — — 1,894 Balance as of June 30, 2018 $ 161,210 $ 122,012 $ 28,484 $ 4,105 $ 315,811 (1) Includes amounts paid in fiscal 2018 associated with the net working capital settlement for the Habilitative Services, Inc. acquisition in fiscal 2017. Intangible Assets Intangible assets consist of the following as of June 30, 2018 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 6 years $ 578,930 $ 317,220 $ 261,710 Non-compete/non-solicit agreements 1 year 7,453 5,748 1,705 Trade names 1 year 8,161 6,267 1,894 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 61,980 43,959 18,021 $ 698,924 $ 373,194 $ 325,730 Intangible assets consist of the following as of September 30, 2017 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 7 years $ 540,826 $ 290,687 $ 250,139 Non-compete/non-solicit agreements 1 year 7,196 5,228 1,968 Trade names 2 years 7,138 4,779 2,359 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 58,443 42,234 16,209 $ 656,003 $ 342,928 $ 313,075 Amortization expense was $12.8 million and $39.4 million for the three and nine months ended June 30, 2018 , respectively, and $9.4 million and $27.4 million for the three and nine months ended June 30, 2017 , respectively. Amortization expense for the three and nine months ended June 30, 2018 includes $1.8 million and $6.0 million of accelerated amortization related to definite-lived intangible assets associated with the divestitures described in Note 12. The estimated remaining amortization expense related to intangible assets with finite lives for the three months remaining in fiscal 2018 and each of the four succeeding years and thereafter is as follows: Year Ended September 30, (in thousands) 2018 $ 11,469 2019 43,432 2020 42,359 2021 38,944 2022 37,140 Thereafter 109,986 Total $ 283,330 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. Fair Value Measurements The Company measures and reports its financial assets and liabilities on the basis of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy for disclosure has been established to show the extent and level of judgment used to estimate fair value measurements, as follows: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Significant other observable inputs (quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability). Level 3: Significant unobservable inputs for the asset or liability. These values are generally determined using pricing models which utilize management estimates of market participant assumptions. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management’s interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain. A description of the valuation methodologies used for instruments measured at fair value as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2018 . (in thousands) Total Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swap agreements (current) $ 2,786 $ — $ 2,786 — Interest rate swap agreements (long-term) 2,968 — 2,968 — Total $ 5,754 $ — $ 5,754 $ — Liabilities Contingent consideration $ 1,080 $ — $ — $ 1,080 The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2017 . (in thousands) Total Quoted Market Prices (Level 1) Significant Significant Unobservable Inputs (Level 3) Liabilities Interest rate swap agreements $ 153 $ — $ 153 $ — Interest rate-swap agreements. The Company’s interest rate-swap agreements are classified within Level 2 of the fair value hierarchy. Based on the timing of the associated cash flows, the fair value of the swap agreements was recorded in Prepaid expenses and other current assets, Other assets, or Other accrued liabilities in the Company’s consolidated balance sheets. The fair value of these agreements was determined based on pricing models and independent formulas using current assumptions that included swap terms, interest rates and forward LIBOR curves and the Company’s credit risk. The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities (acquisition related contingent consideration) measured on a recurring basis for the nine months ended June 30, 2018 . (in thousands) Nine Months Ended June 30, 2018 Balance at September 30, 2017 $ — Acquisition date fair value of contingent consideration obligations recorded 1,080 Balance at June 30, 2018 $ 1,080 The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities (acquisition related contingent consideration) measured on a recurring basis for the nine months ended June 30, 2017. (in thousands) Nine Months Ended Balance at September 30, 2016 $ 5,915 Fair value adjustments 194 Payment (6,109 ) Balance at June 30, 2017 $ — As of June 30, 2018 , the Company had $1.1 million of contingent consideration liabilities, which was reflected in Other accrued liabilities. As of September 30, 2017 , the Company had no contingent consideration liability. At June 30, 2018 and September 30, 2017 , the carrying values of cash, accounts receivable, accounts payable and variable rate debt approximated fair value. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company’s effective income tax rate for the interim periods is based on management’s estimate of the Company’s annual effective tax rate for the applicable year. It is also affected by discrete items that may occur in any given period. The rates differ from the federal statutory income tax rate primarily due to state income taxes and nondeductible permanent differences such as meals and nondeductible compensation. For the three and nine months ended June 30, 2018 , the Company had a provision from income taxes of $4.7 million , or a 32.7% effective income tax rate, and a benefit of $2.4 million , or a (16.8)% effective income tax rate, respectively. This compares to a provision for income taxes of $4.4 million , or a 37.5% effective income tax rate, and $10.6 million , or a 38.5% effective income tax rate, for the three and nine months ended June 30, 2017 , respectively. The benefit from income taxes for the nine months ended June 30, 2018 was primarily due to revaluing of the Company’s deferred tax liabilities as a result of the lower corporate tax rate established by the Tax Cuts and Jobs Act (the “Tax Act”) enacted in the first quarter of fiscal 2018. The Tax Act significantly revises corporate income tax law by, among other things, lowering the corporate income tax rates from 35% to 21%. Under GAAP, deferred taxes must be adjusted for enacted changes in tax laws or rates during the period in which new tax legislation is enacted. ASU 2018-05 allows a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the changes in the Tax Act. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year from the date of enactment of the Tax Act. As of June 30, 2018, the Company has not completed the accounting for the tax effects of the enactment of the Tax Act; however, in certain cases, as described below, the Company has made a reasonable estimate of the effects on existing deferred tax balances and the one-time transition tax. These amounts may require further adjustments as a result of additional future guidance from the U.S. Department of the Treasury, changes in assumptions, and the availability of further information and interpretations. For the items for which the Company was able to determine a reasonable estimate, a provisional tax benefit of $6.7 million was recognized which is included as a component of income tax expense for the nine months ended June 30, 2018. The accounting for the tax effects of the enactment of the Tax Act will be finalized during the fourth quarter of fiscal 2018. The Company remeasured certain deferred tax assets and liabilities based on an estimate of the rates at which they are expected to reverse in the future. However, the Company is still analyzing certain aspects of the Tax Act and refining calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Additionally, the estimates for when timing differences will reverse could differ from actual results at year end, impacting the provisional tax benefit. The Company files a federal consolidated return and files various state income tax returns and, generally, is no longer subject to income tax examinations by the taxing authorities for years prior to September 30, 2015. The Company did not have a reserve for uncertain income tax positions at June 30, 2018 and September 30, 2017 . The Company does not expect any significant changes to unrecognized tax benefits within the next twelve months. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as charges to income tax expense. |
Segment Information
Segment Information | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information The Company conducts its business through three reportable business segments: the Intellectual and Developmental Disabilities (“I/DD”) segment, the Post-Acute Specialty Rehabilitation Services (“SRS”) segment, and the At-Risk Youth (“ARY”) segment. The Company evaluates performance based on EBITDA. EBITDA for each segment is defined as income (loss) from continuing operations for the segment before income taxes, depreciation and amortization, and interest income (expense). Activities classified as “Corporate and Other” in the table below relate to the results of the ADH operating segment and unallocated home office expenses and stock-compensation expense. Total assets included in the Corporate and Other segment include assets associated with our ADH operating segment and assets maintained by our corporate entity including cash, restricted cash, and other current and non-current assets. The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the three months ended June 30, I/DD SRS ARY Corporate and Other Consolidated 2018 Net revenue $ 256,454 $ 90,574 $ 38,266 $ 19,204 $ 404,498 EBITDA 38,035 17,428 6,623 (13,959 ) 48,127 Total assets 489,092 334,265 77,084 221,247 1,121,688 Depreciation and amortization 10,258 7,192 1,398 4,893 23,741 Purchases of property and equipment 6,686 3,509 657 1,843 12,695 2017 Net revenue $ 243,496 $ 77,758 $ 35,368 $ 15,723 $ 372,345 EBITDA 34,098 13,778 5,786 (14,377 ) 39,285 Depreciation and amortization 9,451 5,858 1,407 2,445 19,161 Purchases of property and equipment 7,093 2,865 329 1,899 12,186 A reconciliation of EBITDA to income before income taxes on a consolidated basis is as follows (in thousands): For the three months ended June 30, 2018 2017 EBITDA $ 48,127 $ 39,285 Less: Depreciation and amortization 23,741 19,161 Interest expense, net 10,144 8,339 Income before income taxes $ 14,242 $ 11,785 The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the nine months ended June 30, 2018 I/DD SRS ARY Corporate and Other Consolidated 2018 Net revenue $ 764,388 $ 264,388 $ 110,738 $ 53,203 $ 1,192,717 EBITDA 104,743 41,366 17,224 (49,132 ) 114,201 Total assets 489,092 334,265 77,084 221,247 1,121,688 Depreciation and amortization 31,690 23,720 4,036 12,063 71,509 Purchases of property and equipment 19,829 9,243 1,435 5,138 35,645 2017 Net revenue $ 719,207 $ 229,301 $ 106,784 $ 38,846 $ 1,094,138 EBITDA 99,971 40,670 16,614 (48,344 ) 108,911 Depreciation and amortization 27,988 17,483 4,255 6,420 56,146 Purchases of property and equipment 18,390 8,016 961 5,614 32,981 A reconciliation of EBITDA to income before income taxes on a consolidated basis is as follows (in thousands): For the nine months ended June 30, 2018 2018 2017 EBITDA $ 114,201 $ 108,911 Less: Depreciation and amortization 71,509 56,146 Interest expense, net 28,567 25,112 Income before income taxes $ 14,125 $ 27,653 Revenue derived from contracts with state and local governmental payors in the state of Minnesota, the Company’s largest state operation, which is included in the I/DD segment, accounted for approximately 16% of the Company’s net revenue for the three and nine months ended June 30, 2018 , and 15% of the Company’s net revenue for the three and nine months ended June 30, 2017 . California, the Company’s second largest state operation, accounted for approximately 10% of net revenue for the three and nine months ended June 30, 2018 and 2017 . No other states accounted for 10% or more of our net revenue during the three and nine months ended June 30, 2018 and 2017 . |
Disposition of Business
Disposition of Business | 9 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition of Business | 12. Disposition of Business In connection with a review of under-performing and/or non-strategic programs during the second and third quarters of fiscal 2018, the Company decided to close and/or consolidate a number of programs primarily within the SRS and I/DD segments. During the nine months ended June 30, 2018, the Company incurred exit costs associated with these completed and planned divestitures of $5.5 million , including $4.8 million in lease termination costs, and $0.7 million in severance. In addition, the Company recorded $6.0 million of accelerated amortization related to definite-lived intangible assets and a $1.1 million loss on the disposition of fixed assets associated with these programs. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 13. Net Income Per Share The following table sets forth the computation of basic and diluted earnings per share (“EPS”): Three Months Ended Nine Months Ended June 30, (in thousands, except share and per share amounts) 2018 2017 2018 2017 Numerator Net income $ 9,585 $ 7,361 $ 16,491 $ 17,019 Denominator Weighted average shares outstanding, basic 36,503,170 37,323,458 37,136,375 37,278,760 Weighted average common equivalent shares 89,557 172,030 113,176 134,504 Weighted average shares outstanding, diluted 36,592,727 37,495,488 37,249,551 37,413,264 Net income per share, basic $ 0.26 $ 0.20 $ 0.44 $ 0.46 Net income per share, diluted $ 0.26 $ 0.20 $ 0.44 $ 0.45 Equity instruments excluded from diluted net income per share calculation as the effect would have been anti-dilutive: Stock options 959,614 936,459 815,246 891,187 Performance and restricted stock units 407,774 129,440 375,398 99,489 |
Other Commitments and Contingen
Other Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | 14. Other Commitments and Contingencies The Company is in the health and human services business and, therefore, has been and continues to be subject to numerous claims alleging that the Company, its employees or its independently contracted host-home caregivers (“Mentors”) failed to provide proper care for an individual served by the Company. The Company is also subject to claims by these individuals, its employees, its Mentors or community members against the Company for negligence, intentional misconduct or violation of applicable laws. Included in the Company’s recent claims are claims alleging personal injury, assault, abuse, wrongful death and other charges. Regulatory agencies may initiate administrative proceedings alleging that the Company’s programs, employees or agents violate statutes and regulations and seek to impose monetary penalties on the Company. The Company could be required to incur significant costs to respond to regulatory investigations or defend against civil lawsuits and, if the Company does not prevail, the Company could be required to pay substantial amounts of money in damages, settlement amounts or penalties arising from these legal proceedings. The Company is also subject to potential lawsuits under the False Claims Act and other federal and state whistleblower statutes designed to combat fraud and abuse in the health care industry. These lawsuits can involve significant monetary awards that may incentivize private plaintiffs to bring these suits. If the Company is found to have violated the False Claims Act, it could be excluded from participation in Medicaid and other federal healthcare programs which would have a material adverse effect on the business. The Patient Protection and Affordable Care Act provides a mandate for more vigorous and widespread enforcement activity to combat fraud and abuse in the health care industry. The Company is also subject to employee-related claims under state and federal law, including claims for wage and hour violations under the Fair Labor Standards Act or state wage and hour laws, and claims for discrimination, wrongful discharge or retaliation. The Company currently has two pending complaints in California state court that allege certain wage and hour violations of California labor laws and seek to be designated as class-action. Two additional wage and hour claims have been settled, one of which was settled and approved by the court on January 31, 2018 and and one of which has been preliminarily approved by the court. Final approval and payment for this claim is expected in September 2018. The Company’s policy is to accrue for all probable and estimable claims using information available at the time the financial statements are issued. Actual claims could settle in the future at materially different amounts due to the nature of litigation. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 15. Subsequent Event On July 2, 2018 the Company acquired the assets of Creative Connections, Inc. (“CCI”) for consideration of approximately $2.9 million , including up to $1.5 million of contingent consideration. CCI is located in California and provides community-based services for individuals with intellectual and developmental disabilities. CCI will be included in the Company’s I/DD segment. On August 1, 2018 the Company acquired the assets of Maintaining Independence Adult Day Services, Inc. (“Maintaining Independence”) for a purchase price of approximately $1.2 million . Maintaining Independence is located in New Hampshire and provides adult day health care services. Maintaining Independence will be included in the Company’s Corporate and Other segment. |
Significant Accounting Polici24
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements herein should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 , which is on file with the SEC. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial statements in accordance with GAAP. Intercompany balances and transactions between the Company and its subsidiaries have been eliminated in consolidation. Operating results for the three and nine months ended June 30, 2018 may not necessarily be indicative of results to be expected for any other interim period or for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Adoption of New Accounting Pronouncements Stock Compensation —The Company adopted the guidance in Accounting Standards Update ("ASU") No. 2016-09 Compensation - Stock Compensation - Improvements to Employee Share-Based Payments Accounting , on October 1, 2017. Under this standard, entities are permitted to make an accounting policy election to either estimate forfeitures on share-based payment awards, as previously required, or to recognize forfeitures as they occur. The Company has elected to recognize forfeitures as they occur and the impact of that change in accounting policy has been recorded as a $0.2 million cumulative effect adjustment to increase accumulated deficit as of October 1, 2017. ASU No. 2016-09 requires that all income tax effects related to settlements of share-based payment awards be reported in earnings as an increase (or decrease) to income tax expense (benefit). Previously, income tax benefits at settlement of an award were reported as an increase (or decrease) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits reported in earnings during the award’s vesting period. The requirement to report those income tax effects in earnings has been applied on a prospective basis to settlements occurring on or after October 1, 2017, and the impact of applying the guidance was not material to the consolidated financial statements for the three and nine months ended June 30, 2018 . Application of the guidance may result in fluctuations in the Company’s effective tax rate depending on how many options are exercised, how many restricted stock units vest and the volatility of the Company’s stock price. ASU No. 2016-09 also requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award’s vesting period. The Company has elected to apply the changes in cash flow classification on a prospective basis. 3. Recent Accounting Pronouncements Revenue from Contracts with Customers— In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers Topic 606 (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The FASB has subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. ASU 2014-09, as amended, is effective for the Company’s fiscal year beginning October 1, 2018, and, at that time, the Company will adopt the new standard under the modified retrospective approach for contracts with customers. Under the modified retrospective approach, the guidance is applied to the most current period presented, recognizing the cumulative effect of the adoption change as an adjustment to beginning retained earnings. In fiscal 2017, the Company established a formal program and cross-functional implementation team to identify, design and implement changes to its accounting systems and policies and internal controls to support recognition and disclosure under the new standard. This process included a review of the requirements under the new standard compared to the current accounting policies for each of the Company’s revenue streams. As of the end of the third quarter of fiscal 2018, the Company substantially completed its review and does not expect a material impact on its consolidated financial statements upon implementation on October 1, 2018. The Company is currently preparing to implement changes to accounting policies and controls to support the new revenue recognition and disclosure requirements, which will be finalized during the fourth quarter of fiscal 2018. Leases — In February 2016, the FASB issued ASU No. 2016-02— Leases (Topic 842) (ASU 2016-02). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The standard will be effective for the Company on October 1, 2019. In July 2018, the FASB issued ASU No. 2018-11 — Leases (Topic 842): Targeted Improvements (ASU 2018-11) . Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company is still evaluating the method of adoption. The adoption of this standard is expected to have a material impact on the Company’s financial position. As of June 30, 2018 , the Company had gross operating lease commitments of approximately $361 million . Upon adoption, a substantial portion of these lease commitments will be recorded at their net present value as a right of use asset and a lease obligation. Statement of Cash Flows— In November 2016, the FASB issued ASU No. 2016-18— Statement of Cash Flows (Topic 230): Restricted Cash . The update requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will be applied using a retrospective transition method to each period presented and will be effective for the Company on October 1, 2018. As of June 30, 2018 and September 30, 2017 , the Company had total restricted cash of $50.3 million . Business Combinations — In January 2017, the FASB issued ASU No. 2017-01— Business Combinations (Topic 805): Clarifying the Definition of a Business . The update provides guidance to determine when an integrated set of assets and activities is not a business. When substantially all of the fair value of the gross assets acquired, or disposed of, is concentrated in a single identifiable asset or a group of similar identifiable assets, then the acquisition, or disposition, is not a business. The amendments in this update should be applied prospectively on or after the effective date. No disclosures are required at transition. The new standard will be effective for the Company on October 1, 2018. Early application of the amendments in this update is permitted for transactions meeting certain criteria. This standard could reduce the number of acquisitions that are treated as business combinations in the future. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of June 30, 2018 and September 30, 2017 , the Company’s long-term debt consisted of the following: (in thousands) June 30, September 30, Term loan principal; principal and interest are due in quarterly installments through January 31, 2021 $ 701,978 $ 632,476 Original issue discount on term loan, net of accumulated amortization (1,130 ) (901 ) Deferred financing costs, net of accumulated amortization (4,042 ) (5,122 ) Senior secured revolving credit facility 9,500 — 706,306 626,453 Less current portion of the term loan 7,331 6,554 Less current portion of the senior secured revolving credit facility; matures on January 31, 2019 4,156 — Long-term debt $ 694,819 $ 619,899 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Schedule of Stock Options Activity | Stock option activity for the nine months ended June 30, 2018 is presented below: (in thousands, except share and per share amounts) Number of Weighted- Weighted- Aggregate Outstanding at September 30, 2017 877,781 $ 18.65 Granted 155,041 18.80 Exercised 17,608 17.00 Forfeited 36,381 18.64 Expired 23,081 19.87 Outstanding at June 30, 2018 955,752 $ 18.67 7.6 $ 13 Exercisable at June 30, 2018 566,980 $ 18.55 6.8 $ — Vested or expected to vest as of June 30, 2018 955,752 $ 18.67 7.6 $ 13 |
Schedule of Stock Options Valuation Assumptions | The Company utilizes the Black-Scholes valuation model for estimating the fair value of stock options. Options granted under the 2014 Plan during the nine months ended June 30, 2018 were valued using the following assumptions: 2018 Risk-free interest rate 2.22% - 2.74% Expected term 6 years Expected volatility 33.56% - 35.81% Expected dividend yield — % |
Schedule of Restricted Stock Unit Awards Activity | Restricted stock unit activity for the nine months ended June 30, 2018 is presented below: Number of Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested units at September 30, 2017 677,406 $ 19.20 Granted 405,011 18.21 Forfeited 63,764 18.74 Vested 197,105 19.94 Non-vested units at June 30, 2018 821,548 $ 18.56 |
Schedule of Performance Based Restricted Stock Units | A summary of PRSU activity for the nine months ended June 30, 2018 is as follows: Number of Performance Based Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested units at September 30, 2017 84,505 $ 19.85 Granted 50,834 18.76 Forfeited — — Vested — — Non-vested units at June 30, 2018 135,339 $ 19.44 Units expected to vest as of June 30, 2018 73,646 $ 19.09 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | (in thousands) Identifiable Intangible Assets Other Assets, Net Total Identifiable Assets Goodwill Purchase Consideration Mentis $ 35,300 $ 4,885 $ 40,185 $ 34,502 $ 74,687 Unique 3,939 22 3,961 1,985 5,946 Aging Well and Living Well 9,035 12 9,047 4,105 13,152 Other acquisitions 2,534 111 2,645 — 2,645 Total $ 50,808 $ 5,030 $ 55,838 $ 40,592 $ 96,430 |
Business Acquisition, Pro Forma Information | The following table reflects the unaudited pro forma results of operations for the three and nine months ended June 30, 2018 and 2017 assuming that the acquisitions made during the three and nine months ended June 30, 2018 and 2017 had occurred on October 1, 2016 and 2015, respectively. (in thousands) Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net revenue $ 404,498 $ 391,043 $ 1,201,302 $ 1,160,366 Net income 9,585 10,641 17,343 22,392 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The changes in goodwill for the nine months ended June 30, 2018 are as follows (in thousands): I/DD SRS ARY Corporate and Other Total Balance as of September 30, 2017 $ 159,316 $ 85,525 $ 28,484 $ — $ 273,325 Goodwill acquired through acquisitions — 36,487 — 4,105 40,592 Adjustments to prior acquisitions (1) 1,894 — — — 1,894 Balance as of June 30, 2018 $ 161,210 $ 122,012 $ 28,484 $ 4,105 $ 315,811 (1) Includes amounts paid in fiscal 2018 associated with the net working capital settlement for the Habilitative Services, Inc. acquisition in fiscal 2017. |
Schedule of Finite-lived Intangible Assets | Intangible assets consist of the following as of June 30, 2018 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 6 years $ 578,930 $ 317,220 $ 261,710 Non-compete/non-solicit agreements 1 year 7,453 5,748 1,705 Trade names 1 year 8,161 6,267 1,894 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 61,980 43,959 18,021 $ 698,924 $ 373,194 $ 325,730 Intangible assets consist of the following as of September 30, 2017 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 7 years $ 540,826 $ 290,687 $ 250,139 Non-compete/non-solicit agreements 1 year 7,196 5,228 1,968 Trade names 2 years 7,138 4,779 2,359 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 58,443 42,234 16,209 $ 656,003 $ 342,928 $ 313,075 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consist of the following as of June 30, 2018 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 6 years $ 578,930 $ 317,220 $ 261,710 Non-compete/non-solicit agreements 1 year 7,453 5,748 1,705 Trade names 1 year 8,161 6,267 1,894 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 61,980 43,959 18,021 $ 698,924 $ 373,194 $ 325,730 Intangible assets consist of the following as of September 30, 2017 (in thousands): Description Weighted Average Amortization Period Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 7 years $ 540,826 $ 290,687 $ 250,139 Non-compete/non-solicit agreements 1 year 7,196 5,228 1,968 Trade names 2 years 7,138 4,779 2,359 Trade names (indefinite life) — 42,400 — 42,400 Licenses and permits 3 years 58,443 42,234 16,209 $ 656,003 $ 342,928 $ 313,075 |
Schedule of Amortization Expense Related to Intangible Assets | The estimated remaining amortization expense related to intangible assets with finite lives for the three months remaining in fiscal 2018 and each of the four succeeding years and thereafter is as follows: Year Ended September 30, (in thousands) 2018 $ 11,469 2019 43,432 2020 42,359 2021 38,944 2022 37,140 Thereafter 109,986 Total $ 283,330 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities on a Recurring Basis | The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2018 . (in thousands) Total Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swap agreements (current) $ 2,786 $ — $ 2,786 — Interest rate swap agreements (long-term) 2,968 — 2,968 — Total $ 5,754 $ — $ 5,754 $ — Liabilities Contingent consideration $ 1,080 $ — $ — $ 1,080 The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2017 . (in thousands) Total Quoted Market Prices (Level 1) Significant Significant Unobservable Inputs (Level 3) Liabilities Interest rate swap agreements $ 153 $ — $ 153 $ — |
Summary of Changes in Fair Value of Company's Level 3 Liabilities Measured on Recurring Basis | The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities (acquisition related contingent consideration) measured on a recurring basis for the nine months ended June 30, 2018 . (in thousands) Nine Months Ended June 30, 2018 Balance at September 30, 2017 $ — Acquisition date fair value of contingent consideration obligations recorded 1,080 Balance at June 30, 2018 $ 1,080 The following table presents a summary of changes in fair value of the Company’s Level 3 liabilities (acquisition related contingent consideration) measured on a recurring basis for the nine months ended June 30, 2017. (in thousands) Nine Months Ended Balance at September 30, 2016 $ 5,915 Fair value adjustments 194 Payment (6,109 ) Balance at June 30, 2017 $ — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Performance of Operating Segments | The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the three months ended June 30, I/DD SRS ARY Corporate and Other Consolidated 2018 Net revenue $ 256,454 $ 90,574 $ 38,266 $ 19,204 $ 404,498 EBITDA 38,035 17,428 6,623 (13,959 ) 48,127 Total assets 489,092 334,265 77,084 221,247 1,121,688 Depreciation and amortization 10,258 7,192 1,398 4,893 23,741 Purchases of property and equipment 6,686 3,509 657 1,843 12,695 2017 Net revenue $ 243,496 $ 77,758 $ 35,368 $ 15,723 $ 372,345 EBITDA 34,098 13,778 5,786 (14,377 ) 39,285 Depreciation and amortization 9,451 5,858 1,407 2,445 19,161 Purchases of property and equipment 7,093 2,865 329 1,899 12,186 The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the nine months ended June 30, 2018 I/DD SRS ARY Corporate and Other Consolidated 2018 Net revenue $ 764,388 $ 264,388 $ 110,738 $ 53,203 $ 1,192,717 EBITDA 104,743 41,366 17,224 (49,132 ) 114,201 Total assets 489,092 334,265 77,084 221,247 1,121,688 Depreciation and amortization 31,690 23,720 4,036 12,063 71,509 Purchases of property and equipment 19,829 9,243 1,435 5,138 35,645 2017 Net revenue $ 719,207 $ 229,301 $ 106,784 $ 38,846 $ 1,094,138 EBITDA 99,971 40,670 16,614 (48,344 ) 108,911 Depreciation and amortization 27,988 17,483 4,255 6,420 56,146 Purchases of property and equipment 18,390 8,016 961 5,614 32,981 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of EBITDA to income before income taxes on a consolidated basis is as follows (in thousands): For the nine months ended June 30, 2018 2018 2017 EBITDA $ 114,201 $ 108,911 Less: Depreciation and amortization 71,509 56,146 Interest expense, net 28,567 25,112 Income before income taxes $ 14,125 $ 27,653 A reconciliation of EBITDA to income before income taxes on a consolidated basis is as follows (in thousands): For the three months ended June 30, 2018 2017 EBITDA $ 48,127 $ 39,285 Less: Depreciation and amortization 23,741 19,161 Interest expense, net 10,144 8,339 Income before income taxes $ 14,242 $ 11,785 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (“EPS”): Three Months Ended Nine Months Ended June 30, (in thousands, except share and per share amounts) 2018 2017 2018 2017 Numerator Net income $ 9,585 $ 7,361 $ 16,491 $ 17,019 Denominator Weighted average shares outstanding, basic 36,503,170 37,323,458 37,136,375 37,278,760 Weighted average common equivalent shares 89,557 172,030 113,176 134,504 Weighted average shares outstanding, diluted 36,592,727 37,495,488 37,249,551 37,413,264 Net income per share, basic $ 0.26 $ 0.20 $ 0.44 $ 0.46 Net income per share, diluted $ 0.26 $ 0.20 $ 0.44 $ 0.45 Equity instruments excluded from diluted net income per share calculation as the effect would have been anti-dilutive: Stock options 959,614 936,459 815,246 891,187 Performance and restricted stock units 407,774 129,440 375,398 99,489 |
Business Overview (Details)
Business Overview (Details) | Jun. 30, 2018stateclient |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Area of operations, number of states | state | 36 |
Number of residential clients | 12,500 |
Number of periodic clients | 19,000 |
Significant Accounting Polici33
Significant Accounting Policies (Details) $ in Thousands | Sep. 30, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment | $ (59) |
Accumulated Deficit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment | 160 |
Accounting Standards Update 2016-09, Forfeiture Rate Component | Accumulated Deficit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment | $ 200 |
Recent Accounting Pronounceme34
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Sep. 30, 2017 |
Accounting Changes and Error Corrections [Abstract] | ||
Operating lease commitments | $ 361 | |
Restricted cash | $ 50.3 | $ 50.3 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
Term loan principal; principal and interest are due in quarterly installments through January 31, 2021 | $ 701,978 | $ 632,476 |
Original issue discount on term loan, net of accumulated amortization | (1,130) | (901) |
Deferred financing costs, net of accumulated amortization | (4,042) | (5,122) |
Senior secured revolving credit facility | 9,500 | 0 |
Long-term debt, current and non-current | 706,306 | 626,453 |
Less current portion of the term loan | 11,487 | 6,554 |
Long-term debt | 694,819 | 619,899 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Less current portion of the term loan | 7,331 | 6,554 |
Senior Revolver | ||
Debt Instrument [Line Items] | ||
Less current portion of the term loan | $ 4,156 | $ 0 |
Long-Term Debt - Senior Secured
Long-Term Debt - Senior Secured Credit Facilities - Additional Information (Details) - USD ($) | Nov. 21, 2017 | Jun. 30, 2018 | Oct. 24, 2017 | Sep. 30, 2017 | Jan. 31, 2014 |
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | $ 701,978,000 | $ 632,476,000 | |||
Senior secured revolving credit facility | $ 9,500,000 | 0 | |||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Deposit in cash collateral | $ 50,000,000 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 730,000,000 | 655,000,000 | |||
Term Loan | Alternate Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Variable rate floor | 2.00% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Deposit in cash collateral | $ 160,000,000 | ||||
NMH Investment | |||||
Debt Instrument [Line Items] | |||||
Line of credit borrowing capacity | $ 48,500,000 | ||||
NMH Investment | Alternate Base Rate | Interest Rate Swap One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
NMH Investment | Alternate Base Rate | Revolving and Swingline Loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
NMH Investment | Eurodollar | Interest Rate Swap One | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.00% | ||||
NMH Investment | Eurodollar | Revolving and Swingline Loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.25% | ||||
NMH Investment | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 75,000,000 | ||||
NMH Investment | Term Loan | Federal Funds | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
NMH Investment | Term Loan | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 3.00% | ||||
Variable rate floor | 0.75% | ||||
NMH Investment | Term Loan | Eurodollar | Revolving and Swingline Loans | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 3.25% | ||||
NMH Investment | Term Loan | Eurodollar | Minimum | |||||
Debt Instrument [Line Items] | |||||
Variable rate floor | 0.75% | ||||
NMH Investment | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 160,000,000 | $ 120,000,000 | |||
Basis points for interest rate | 0.25% | ||||
NMH Investment | Line of Credit | Senior Credit Agreement, Maturing January 31, 2021 | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 90,000,000 | ||||
NMH Investment | Line of Credit | Senior Credit Agreement, Maturing January 31, 2019 | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 70,000,000 | ||||
NMH Investment | Line of Credit | Federal Funds | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
NMH Investment | Senior Revolver | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, commitment fee | 0.50% | ||||
NMH Investment | Letter of Credit | Line of Credit | Senior Revolver | |||||
Debt Instrument [Line Items] | |||||
Amount of term loan facility | $ 2,900,000 |
Long-Term Debt - Covenants - Ad
Long-Term Debt - Covenants - Additional Information (Details) - NMH Investment | 9 Months Ended |
Jun. 30, 2018 | |
Debt Instrument [Line Items] | |
Percentage of revolving commitments | 30.00% |
Consolidated first lien leverage ratio, maximum | 5 |
Long-Term Debt - Derivatives -
Long-Term Debt - Derivatives - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Jan. 20, 2015USD ($)swap | |
Debt Instrument [Line Items] | ||||||
Ineffectiveness associated with swap | $ 100,000 | $ 200,000 | $ 0 | |||
Amount excluded from ineffectiveness testing | 0 | $ 0 | 0 | $ 0 | ||
NMH Investment | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Number of interest rate swap agreements | swap | 2 | |||||
Interest rate swap in a notional amount | $ 375,000,000 | |||||
Payments on fixed rate | 1.795% | |||||
Derivative asset | $ 5,800,000 | $ 5,800,000 | ||||
Derivative liability | $ 200,000 | |||||
Minimum | NMH Investment | Interest Rate Swap | ||||||
Debt Instrument [Line Items] | ||||||
Minimum interest received from counter party | 1.00% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 7,786,478 | 7,786,478 | ||
Share-based compensation expense | $ 2,000 | $ 2,200 | $ 5,792 | $ 6,596 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Intrinsic value of options exercised (less than) | 100 | |||
Unrecognized compensation cost | 1,900 | $ 1,900 | ||
Unrecognized compensation cost, period for recognition | 1 year 10 months | |||
Performance and Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | 10,800 | $ 10,800 | ||
Unrecognized compensation cost, period for recognition | 1 year 11 months | |||
Fair value of awards vested during period | 100 | $ 3,500 | ||
PRSUs awarded (in shares) | 405,011 | |||
Granted (dollars per share) | $ 18.21 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 1,000 | $ 1,000 | ||
Unrecognized compensation cost, period for recognition | 2 years | |||
Service period | 3 years | |||
Performance Restricted Stock Units (PRSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
PRSUs awarded (in shares) | 50,834 | |||
Granted (dollars per share) | $ 18.76 | |||
Minimum | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting percentage | 0.00% | |||
Maximum | Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vesting percentage | 200.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at period start (shares) | shares | 877,781 |
Granted (shares) | shares | 155,041 |
Exercised (shares) | shares | 17,608 |
Forfeited (shares) | shares | 36,381 |
Expired (shares) | shares | 23,081 |
Outstanding at period end (shares) | shares | 955,752 |
Exercisable at period end (shares) | shares | 566,980 |
Vested or expected to vest (shares) | shares | 955,752 |
Weighted- Average Exercise Price per Share | |
Outstanding at period start (dollars per share) | $ / shares | $ 18.65 |
Granted (dollars per share) | $ / shares | 18.80 |
Exercised (dollars per share) | $ / shares | 17 |
Forfeited (dollars per share) | $ / shares | 18.64 |
Expired (dollars per share) | $ / shares | 19.87 |
Outstanding at period end (dollars per share) | $ / shares | 18.67 |
Exercisable at end of year (dollars per share) | $ / shares | 18.55 |
Vested or expected to vest (dollars per share) | $ / shares | $ 18.67 |
Outstanding weighted-average remaining life | 7 years 7 months |
Exercisable weighted-average remaining life | 6 years 10 months |
Vested or expected to vest weighed-average remaining life | 7 years 7 months |
Outstanding at period end, aggregate intrinsic value | $ | $ 13 |
Exercisable at period end, aggregate intrinsic value | $ | 0 |
Vested or expected to vest at period end, aggregate intrinsic value | $ | $ 13 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions in Calculating the Fair Value (Details) - Stock options | 9 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 6 years |
Expected dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.22% |
Expected volatility | 33.56% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.74% |
Expected volatility | 35.81% |
Stock-Based Compensation - Nonv
Stock-Based Compensation - Nonvested Restricted Stock Awards (Details) - Performance and Restricted stock units | 9 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested beginning balance (shares) | shares | 677,406 |
Granted (shares) | shares | 405,011 |
Forfeited (shares) | shares | 63,764 |
Vested (shares) | shares | 197,105 |
Non-vested ending balance (shares) | shares | 821,548 |
Weighted Average Grant-Date Fair Value | |
Non-vested beginning balance (dollars per share) | $ / shares | $ 19.20 |
Granted (dollars per share) | $ / shares | 18.21 |
Forfeited (dollars per share) | $ / shares | 18.74 |
Vested (dollars per share) | $ / shares | 19.94 |
Non-vested ending balance (dollars per share) | $ / shares | $ 18.56 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Based Restricted Stock Awards (Details) - Performance Restricted Stock Units (PRSUs) | 9 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Number of Restricted Stock Units | |
Non-vested beginning balance (shares) | shares | 84,505 |
Granted (shares) | shares | 50,834 |
Forfeited (shares) | shares | 0 |
Vested (shares) | shares | 0 |
Non-vested ending balance (shares) | shares | 135,339 |
Units expected to vest (shares) | shares | 73,646 |
Weighted Average Grant-Date Fair Value | |
Non-vested beginning balance (dollars per share) | $ / shares | $ 19.85 |
Granted (dollars per share) | $ / shares | 18.76 |
Forfeited (dollars per share) | $ / shares | 0 |
Vested (dollars per share) | $ / shares | 0 |
Non-vested ending balance (dollars per share) | $ / shares | 19.44 |
Units expected to vest, Weighted Average Grant-Date Fair Value (dollars per share) | $ / shares | $ 19.09 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Feb. 08, 2018 | |
Equity [Abstract] | |||
Shares authorized for repurchase (shares) | 25,000,000 | ||
Shares repurchased (shares) | 1,351,892 | ||
Shares repurchased, value | $ 19,700 | $ 19,669 | |
Remaining authorized repurchase amount, value | $ 5,300 | $ 5,300 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) | Apr. 02, 2018USD ($) | Dec. 04, 2017USD ($) | Oct. 25, 2017USD ($) | Jun. 30, 2018USD ($)company | Sep. 30, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Number of companies | company | 9 | ||||
Payment to acquire assets | $ 96,430,000 | ||||
Cash acquired from acquisition | 800,000 | ||||
Contingent consideration liability | 1,100,000 | $ 0 | |||
Assets acquired | 50,808,000 | ||||
Goodwill | 315,811,000 | $ 273,325,000 | |||
Revenue since acquisition date | 33,200,000 | ||||
Mentis | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire assets | $ 74,700,000 | 74,687,000 | |||
Cash acquired from acquisition | 800,000 | ||||
Assets acquired | 35,300,000 | 35,300,000 | |||
Other assets | 4,900,000 | ||||
Unique | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire assets | $ 5,900,000 | 5,946,000 | |||
Assets acquired | 3,900,000 | 3,939,000 | |||
Aging Well and Living Well | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire assets | $ 13,200,000 | 13,152,000 | |||
Assets acquired | 9,000,000 | 9,035,000 | |||
Other acquisitions | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire assets | 2,645,000 | ||||
Contingent consideration liability | 1,100,000 | ||||
Assets acquired | 2,534,000 | ||||
Cash consideration | $ 1,600,000 | ||||
Agency contracts | Mentis | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 30,200,000 | ||||
Useful life | 12 years | ||||
Agency contracts | Unique | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 3,700,000 | ||||
Useful life | 11 years | ||||
Agency contracts | Aging Well and Living Well | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 8,100,000 | ||||
Useful life | 12 years | ||||
Licenses and permits | Mentis | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 3,800,000 | ||||
Useful life | 10 years | ||||
Licenses and permits | Aging Well and Living Well | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 900,000 | ||||
Useful life | 10 years | ||||
Trade names | Mentis | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 900,000 | ||||
Useful life | 5 years | ||||
SRS | Mentis | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 34,500,000 | ||||
SRS | Unique | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 2,000,000 | ||||
Corporate and Other [Member] | Aging Well and Living Well | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 4,100,000 |
Business Combinations - Schedul
Business Combinations - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Dec. 04, 2017 | Oct. 25, 2017 | Jun. 30, 2018 |
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | $ 50,808 | |||
Other Assets, Net | 5,030 | |||
Total Identifiable Assets | 55,838 | |||
Goodwill | 40,592 | |||
Purchase Consideration | 96,430 | |||
Mentis | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | $ 35,300 | 35,300 | ||
Other Assets, Net | 4,885 | |||
Total Identifiable Assets | 40,185 | |||
Goodwill | 34,502 | |||
Purchase Consideration | $ 74,700 | 74,687 | ||
Unique | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | $ 3,900 | 3,939 | ||
Other Assets, Net | 22 | |||
Total Identifiable Assets | 3,961 | |||
Goodwill | 1,985 | |||
Purchase Consideration | $ 5,900 | 5,946 | ||
Aging Well and Living Well | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | $ 9,000 | 9,035 | ||
Other Assets, Net | 12 | |||
Total Identifiable Assets | 9,047 | |||
Goodwill | 4,105 | |||
Purchase Consideration | $ 13,200 | 13,152 | ||
Other acquisitions | ||||
Business Acquisition [Line Items] | ||||
Identifiable Intangible Assets | 2,534 | |||
Other Assets, Net | 111 | |||
Total Identifiable Assets | 2,645 | |||
Goodwill | 0 | |||
Purchase Consideration | $ 2,645 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Combinations [Abstract] | ||||
Net revenue | $ 404,498 | $ 391,043 | $ 1,201,302 | $ 1,160,366 |
Net income | $ 9,585 | $ 10,641 | $ 17,343 | $ 22,392 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets - Schedule of Changes in Goodwill (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of September 30, 2017 | $ 273,325 |
Goodwill acquired through acquisitions | 40,592 |
Adjustments to prior acquisitions | 1,894 |
Balance as of June 30, 2018 | 315,811 |
Operating Segments | I/DD | |
Goodwill [Roll Forward] | |
Balance as of September 30, 2017 | 159,316 |
Goodwill acquired through acquisitions | 0 |
Adjustments to prior acquisitions | 1,894 |
Balance as of June 30, 2018 | 161,210 |
Operating Segments | SRS | |
Goodwill [Roll Forward] | |
Balance as of September 30, 2017 | 85,525 |
Goodwill acquired through acquisitions | 36,487 |
Adjustments to prior acquisitions | 0 |
Balance as of June 30, 2018 | 122,012 |
Operating Segments | ARY | |
Goodwill [Roll Forward] | |
Balance as of September 30, 2017 | 28,484 |
Goodwill acquired through acquisitions | 0 |
Adjustments to prior acquisitions | 0 |
Balance as of June 30, 2018 | 28,484 |
Corporate and Other | |
Goodwill [Roll Forward] | |
Balance as of September 30, 2017 | 0 |
Goodwill acquired through acquisitions | 4,105 |
Adjustments to prior acquisitions | 0 |
Balance as of June 30, 2018 | $ 4,105 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 698,924 | $ 656,003 |
Accumulated Amortization | 373,194 | 342,928 |
Intangible Assets, Net | 325,730 | 313,075 |
Trade names (indefinite life) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Net | $ 42,400 | $ 42,400 |
Agency contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 6 years | 7 years |
Gross Carrying Value | $ 578,930 | $ 540,826 |
Accumulated Amortization | 317,220 | 290,687 |
Intangible Assets, Net | $ 261,710 | $ 250,139 |
Non-compete/non-solicit agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 1 year | 1 year |
Gross Carrying Value | $ 7,453 | $ 7,196 |
Accumulated Amortization | 5,748 | 5,228 |
Intangible Assets, Net | $ 1,705 | $ 1,968 |
Trade names (indefinite life) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 1 year | 2 years |
Gross Carrying Value | $ 8,161 | $ 7,138 |
Accumulated Amortization | 6,267 | 4,779 |
Intangible Assets, Net | $ 1,894 | $ 2,359 |
Licenses and permits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period | 3 years | 3 years |
Gross Carrying Value | $ 61,980 | $ 58,443 |
Accumulated Amortization | 43,959 | 42,234 |
Intangible Assets, Net | $ 18,021 | $ 16,209 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 12.8 | $ 9.4 | $ 39.4 | $ 27.4 |
Accelerated amortization | $ 1.8 | $ 6 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 11,469 |
2,019 | 43,432 |
2,020 | 42,359 |
2,021 | 38,944 |
2,022 | 37,140 |
Thereafter | 109,986 |
Total | $ 283,330 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Sep. 30, 2017 |
Recurring | Contingent consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 1,080 | |
Recurring | Contingent consideration | Quoted Market Prices (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | |
Recurring | Contingent consideration | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | |
Recurring | Contingent consideration | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 1,080 | |
Recurring | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 5,754 | |
Liabilities | $ 153 | |
Recurring | Interest rate swap agreements | Quoted Market Prices (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Liabilities | 0 | |
Recurring | Interest rate swap agreements | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 5,754 | |
Liabilities | 153 | |
Recurring | Interest rate swap agreements | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Liabilities | $ 0 | |
Other Current Assets | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,786 | |
Other Current Assets | Interest rate swap agreements | Quoted Market Prices (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Other Current Assets | Interest rate swap agreements | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,786 | |
Other Current Assets | Interest rate swap agreements | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Other Noncurrent Assets | Interest rate swap agreements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,968 | |
Other Noncurrent Assets | Interest rate swap agreements | Quoted Market Prices (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Other Noncurrent Assets | Interest rate swap agreements | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,968 | |
Other Noncurrent Assets | Interest rate swap agreements | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 0 | $ 5,915 |
Acquisition date fair value of contingent consideration obligations recorded | 1,080 | 194 |
Payment | (6,109) | |
Balance at end of period | $ 1,080 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Fair Value Disclosures [Abstract] | ||
Contingent consideration liability | $ 1,100,000 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Provision (benefit) for income taxes | $ 4,657,000 | $ 4,424,000 | $ (2,366,000) | $ 10,634,000 | |
Effective income tax rate | 32.70% | 37.50% | (16.80%) | 38.50% | |
Provisional tax benefit | $ 6,700,000 | ||||
Reserve for uncertain tax positions | $ 0 | $ 0 | $ 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | 3 | |||
SRS | Minnesota | Geographic Concentration Risk | Sales Revenue, Segment | ||||
Segment Reporting Information [Line Items] | ||||
Percent of revenue | 16.00% | 15.00% | ||
SRS | California | Geographic Concentration Risk | Sales Revenue, Segment | ||||
Segment Reporting Information [Line Items] | ||||
Percent of revenue | 10.00% | 10.00% | 10.00% | 10.00% |
Segment Information - Performan
Segment Information - Performance of Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 404,498 | $ 372,345 | $ 1,192,717 | $ 1,094,138 | |
EBITDA | 48,127 | 39,285 | 114,201 | 108,911 | |
Total assets | 1,121,688 | 1,121,688 | $ 1,049,382 | ||
Depreciation and amortization | 23,741 | 19,161 | 71,509 | 56,146 | |
Purchases of property and equipment | 12,695 | 12,186 | 35,645 | 32,981 | |
Operating Segments | I/DD | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 256,454 | 243,496 | 764,388 | 719,207 | |
EBITDA | 38,035 | 34,098 | 104,743 | 99,971 | |
Total assets | 489,092 | 489,092 | |||
Depreciation and amortization | 10,258 | 9,451 | 31,690 | 27,988 | |
Purchases of property and equipment | 6,686 | 7,093 | 19,829 | 18,390 | |
Operating Segments | SRS | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 90,574 | 77,758 | 264,388 | 229,301 | |
EBITDA | 17,428 | 13,778 | 41,366 | 40,670 | |
Total assets | 334,265 | 334,265 | |||
Depreciation and amortization | 7,192 | 5,858 | 23,720 | 17,483 | |
Purchases of property and equipment | 3,509 | 2,865 | 9,243 | 8,016 | |
Operating Segments | ARY | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 38,266 | 35,368 | 110,738 | 106,784 | |
EBITDA | 6,623 | 5,786 | 17,224 | 16,614 | |
Total assets | 77,084 | 77,084 | |||
Depreciation and amortization | 1,398 | 1,407 | 4,036 | 4,255 | |
Purchases of property and equipment | 657 | 329 | 1,435 | 961 | |
Corporate and Other | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 19,204 | 15,723 | 53,203 | 38,846 | |
EBITDA | (13,959) | (14,377) | (49,132) | (48,344) | |
Total assets | 221,247 | 221,247 | |||
Depreciation and amortization | 4,893 | 2,445 | 12,063 | 6,420 | |
Purchases of property and equipment | $ 1,843 | $ 1,899 | $ 5,138 | $ 5,614 |
Segment Information - Reconcili
Segment Information - Reconciliation of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting [Abstract] | ||||
EBITDA | $ 48,127 | $ 39,285 | $ 114,201 | $ 108,911 |
Depreciation and amortization | 23,741 | 19,161 | 71,509 | 56,146 |
Interest expense, net | 10,144 | 8,339 | 28,567 | 25,112 |
Income before income taxes | $ 14,242 | $ 11,785 | $ 14,125 | $ 27,653 |
Disposition of Business (Detail
Disposition of Business (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accelerated amortization | $ 1.8 | $ 6 |
SRS and I/DD Segments | Disposal Group, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Business exit costs | 5.5 | |
Accelerated amortization | 6 | |
Loss on disposition of business | 1.1 | |
SRS and I/DD Segments | Disposal Group, Disposed of by Sale | Contract Termination | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Business exit costs | 4.8 | |
SRS and I/DD Segments | Disposal Group, Disposed of by Sale | Severance | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Business exit costs | $ 0.7 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator | ||||
Net income | $ 9,585 | $ 7,361 | $ 16,491 | $ 17,019 |
Denominator | ||||
Weighted average shares outstanding, basic (in shares) | 36,503,170 | 37,323,458 | 37,136,375 | 37,278,760 |
Weighted average common equivalent shares (in shares) | 89,557 | 172,030 | 113,176 | 134,504 |
Weighted average shares outstanding, diluted (in shares) | 36,592,727 | 37,495,488 | 37,249,551 | 37,413,264 |
Net income per share, basic (in dollars per share) | $ 0.26 | $ 0.20 | $ 0.44 | $ 0.46 |
Net income per share, diluted (in dollars per share) | $ 0.26 | $ 0.20 | $ 0.44 | $ 0.45 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Equity instruments excluded from diluted net income per share calculation as the effect would have been anti-dilutive (in shares) | 959,614 | 936,459 | 815,246 | 891,187 |
Performance and restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Equity instruments excluded from diluted net income per share calculation as the effect would have been anti-dilutive (in shares) | 407,774 | 129,440 | 375,398 | 99,489 |
Other Commitments and Conting61
Other Commitments and Contingencies (Details) | Jun. 30, 2018complaint |
Commitments and Contingencies Disclosure [Abstract] | |
Pending complaints | 2 |
Settled wage and hour claims | 2 |
Subsequent Event (Details)
Subsequent Event (Details) - CCI - Subsequent Event $ in Millions | Jul. 02, 2018USD ($) |
Subsequent Event [Line Items] | |
Consideration transferred | $ 2.9 |
Contingent consideration, asset | $ 1.5 |